How FBA sellers can adapt to Amazon’s Q4 warehouse restrictions
Updated: Jan 25
Amazon restricting warehouse space for FBA businesses going into what’s expected to be a huge holiday season for e-commerce has many sellers struggling to adjust to this new reality. As an operator of over a dozen FBA brands here are some tips sellers can use to adapt.
Get your inventory to the sales market before creating your shipping plan - there is nothing worse than watching your FBA inventory dwindle while you wait for your replenishment to travel internationally. Order enough inventory to meet your forecasted demand and ship it to a local warehouse to minimize tying up your already limited FBA Inventory capacity for extended periods of time.
Monitor FBA inventory levels constantly, and ship frequently - keep an eye on your restock report, and ensure that you are replenishing to maximum allowed inventory levels frequently. Small, frequent shipments mitigate the risk that large quantities of inventory will be stuck outside of a backlogged Fulfillment Center.
Review your supplier shipment packing guidelines - lower unit quantities per shipping carton can help you replenish your inventory in smaller increments. This is particularly impactful for new product launches or for low velocity products that are limited to 200 units of inventory.
Account for capacity constraints across the broader international supply chain - every transportation provider is having trouble operating in a COVID world. LTL carriers are having a tough time executing on time pickups and scheduling deliveries to Amazon's network. Ground carriers are facing a massive capacity crunch, which will only get worse as holiday sales increase parcel shipment volume exponentially. Everything will take longer than it usually does, pickups are being missed, and exceptions are taking longer to fix.
Drive Sales - consider increasing your PPC / Promotion spend to drive sales, which will increase your inventory limits with Amazon.
Create redundancy plans through strategic partnerships to de risk your operations- for warehousing partners, you're looking for a partner that is:
Near your most frequently assigned Amazon FC(s) to minimize the number of buildings that need handle your shipments.
Receives and sends shipments quickly and accurately to minimize inventory dwell times in the parts of your supply chain that you can control.
Labels cleanly and accurately to reduce inbound processing errors and delays.
Can quickly support a switch to FBM to fulfill your orders if Amazon runs out of stock or doesn't inbound your replenishment shipments on time.
Has enough volume to justify drop trailers for your shipping partners to reduce the need for scheduled pickups.
For Carrier partners (non-Amazon Partnered Carriers) - find a partner that regularly executes multiple deliveries to Amazon each week. This will reduce the need to schedule a delivery just for your product into Amazon's already backed up FCs
For all partnerships - find a partner that values you and your business appropriately and is willing and able to react quickly to your needs. The FBA environment is constantly changing - adaptability and responsiveness are critical.
If You're in a Jam:
Test the Inventory Placement Service - if your shipments are often routed to a backlogged or slow Fulfillment Center, you may be assigned another if you opt in to the Inventory Placement Service. It isn't cheap, but it may be the difference between slightly less profit or a stock out.
Good luck out there!
Chief Operating Officer, Perch